Employers support HSA changes to make them more flexible
Health Savings Accounts and qualifying High-Deductible Health Plans have become an integral part of many employers’ health benefit offerings. A number of changes to rules governing HSAs and HDHPs have been proposed that would make them more accessible and flexible in terms of who could access them (for example, making HSAs available to everyone, not just those enrolled in a high-deductible health plan, allowing Medicare beneficiaries to make/receive HSA contributions), the annual HSA contribution amounts, and types of reimbursable HSA and pre-deductible HDHP covered expenses.
In our recent Survey on Health Policy 2025, with more than 500 organizations responding, we asked employers to rate a number of proposals in terms of their importance to their organization and employees on a scale of 0-4, with 0 being “Oppose the change” and 4 being “Extremely important.” Among large employers (500 or more employees), the highest average rating was for allowing the use of HSA funds for long-term care services – which employers may have assumed was already allowed. After that, employers were most likely to strongly support allowing telemedicine and mental health services to be covered pre-deductible without interfering with HSA eligibility, and higher annual HSA contributions limits.
Importance of proposed changes to HSAs, ranked by employers on a scale of 0-4
| Use of HSA funds | |
|---|---|
Use of HSA funds 3.2 |
Allow use of HSA funds for qualified long-term care services needed for chronically ill individuals |
Use of HSA funds 2.7 |
Allow individuals to use HSA dollars to purchase any health plan or direct primary care services arrangements |
| Pre-deductible coverage | |
Pre-deductible coverage 2.9 |
Permit pre-deductible HDHP coverage and individual’s use of telemedicine/remote care services* |
Pre-deductible coverage 2.9 |
Permit HSA-qualifying HDHPs to provide pre- or no-deductible coverage for up to $500 of mental health benefits |
Pre-deductible coverage 2.4 |
Permit pre-deductible use of onsite or near-site medical clinics* |
| Design | |
Design 2.9 |
Increase annual HSA contribution limits |
Design 2.4 |
Remove requirement to be enrolled in an HDHP to be HSA-eligible |
| Funding flexibility | |
Funding flexibility 2.6 |
Allow otherwise HSA-eligible individuals enrolled in Medicare Part A, as well as those receiving care through the VA, an Indian Health Service or tribal organization facility, to make or receive HSA contributions |
Funding flexibility 2.2 |
Allow individuals to convert their own health FSA or health reimbursement arrangement dollars into an HSA |
Funding flexibility 2.2 |
Allow HSA-eligible spouses to make age 55+ catch-up contributions (i.e., $1,000) to the same HSA |
*Without interfering with HSA eligibility
Source: Mercer’s 2025 Health Policy Survey; employers with 500 or more employees
In addition, just over half of large employers believed it was extremely or very important to remove the requirement to be enrolled in an HDHP to be HSA-eligible. In 2024, according to Mercer’s National Survey of Employer-Sponsored Health Plans, 37% of employees enrolled in an HSA-qualifying HDHP option. It is likely that many of those not currently enrolled in an HSA-qualifying HDHP plan would benefit from the opportunity to save for future medical expenses. For example, employees who are not best-served by a HDHP – perhaps because they or a family member have a chronic condition that results in significant expense each year – could still benefit from the triple-tax savings afforded by an HSA to help with medical expenses after retirement.
Outlook for HSA and HDHP reforms
While employers have been asking for some time for modifications to HSA and HDHP rules to make them more flexible, available to more people, and able to provide a greater benefit, getting legislation across the finish line has been difficult. Furthermore, the future is now uncertain for renewal of expired telehealth flexibility for HSA-qualifying HDHPs after Congress declined to add the provision to a March government funding measure. The provision was part of a bipartisan, bicameral healthcare package included in a December government funding bill but dropped just before final passage amid concerns from President Donald Trump and Elon Musk that the broader funding bill contained too many unrelated provisions.
Employers understand that one-size-fits-all benefits do not work for everyone, and that more flexibility for this popular benefit is badly needed. While there is a cost in lost tax revenue to expanding HSA flexibility, policymakers are very aware that health care affordability is a big issue for many workers – and that healthcare expense tend to climb as people age. HSAs are an easy way to save for that “rainy day” – but changes are needed to make them work better for more people.
The employer voice in DC is important. Elected officials care about their constituents – businesses and individuals. Employers can and should continue to work with employer advocacy groups (or even on their own) to promote more flexible regulations around HSAs and HDHPs. In the meantime, they may be able to take steps to improve the accessibility, value and outcomes of their HSA-based plans today, within the existing framework. Watch this space for an upcoming blog post that will help you get started.
